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Old 16-08-2020, 04:41 PM   #2641
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I'll give Schwab a call tomorrow and see if I can open an account! What's the reason that you recommend SWYNX? (I'm not really aware of the alternatives)
SWYNX is Schwab’s 2060 target date index fund. It’s a single fund that does everything a regular saver needs for a primarily U.S. dollar-oriented retirement in approximately 2060 (since the bond component is in U.S. dollars). If you don’t actually end up retiring in a U.S. dollar-oriented country then you can make some adjustments many, many years from now, but this is a good, simple choice right now for long-term investing (U.S. person).

By monthly savings flow, do you mean how much am I looking to set aside every month for investing?
Yes.

I'm generally familiar with Form 2555 but I have not considered opening a Roth IRA alongside CPF, is that something you recommend?
You’re allowed to if you have (a) earned income (such as the employer’s CPF contribution) (b) that hasn’t been excluded via Form 2555 (c) don’t exceed the income limit for contributing directly to a Roth IRA and (d) don’t exceed the annual contribution limit or your unexcluded earned income, whichever is lower. [If you violate requirement (c) then congratulations, and there’s a workaround available. Ask if you’d like to know more.] A Roth IRA means that you contribute after tax dollars to a specific account — into a Schwab IRA, for example — and then the funds are completely U.S. tax free if you only withdraw them at age 59 1/2 or later (earlier in a few narrow cases). There’s no requirement to withdraw them, however. No U.S. dividend, interest, or capital gains tax! Awesome, right? However, if you withdraw dollars too early, you pay ordinary taxes plus a small (but non-zero) tax penalty. You can make any investments that the IRA custodian allows (such as a low cost U.S. domiciled stock index fund), you can change your mind about the investments, and you can move your IRA to another IRA custodian if you happen not to like the one you’ve got.

Anyway, yes, I’d recommend a Roth IRA if you’re eligible. It’s the first stop in retirement savings because of the tax advantages. And in some cases the tax advantages are internationally respected since the U.S. has tax treaties that honor the Roth IRA in some cases. In other cases, like Singapore, there are no local taxes on such investments, so it still works great.

I do not have a U.S. bank account as I came here at a young age, is there a way to open one without flying back?
Yes, maybe. Alliant Credit Union may be willing to open an account for you, and they’re terrific. Their ATM/debit card is truly awesome, although so is Schwab’s. PenFed and the State Department Federal Credit Union are also known to be pretty friendly to U.S. expats. If you’ve got a U.S. mailing address — a trusted friend’s or family member’s for example — then you should be able to open an American Express Bluebird account at Bluebird.com using that address plus your U.S. Social Security Number (which they definitely require). Using a VPN is probably a good idea, too. Bluebird is a basic consumer bank account, and it’s mostly fee free. The few fees they’ve got should be easily avoidable. They provide an American Express debit card which is pretty decent, actually.

How young, if you don’t mind my asking?

I was born in the U.S. and resided in the same place of residence until my family emigrated to Singapore, so it sounds like I should be registering to vote using that address.
Correct. May I ask which state?
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Old 16-08-2020, 05:29 PM   #2642
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If you don’t actually end up retiring in a U.S. dollar-oriented country then you can make some adjustments many, many years from now, but this is a good, simple choice right now for long-term investing (U.S. person).
What is considered a U.S. dollar-oriented country?

Currently I'm thinking of SGD$1000 a month for monthly savings flow but this number isn't really set in stone.

Anyway, yes, I’d recommend a Roth IRA if you’re eligible.
Ok, I'll look into it, it sounds like I'm eligible based on what you've described.

If you’ve got a U.S. mailing address — a trusted friend’s or family member’s for example — then you should be able to open an American Express Bluebird account at Bluebird.com using that address plus your U.S. Social Security Number (which they definitely require).
This sounds doable, I have a lot of family back in the states.

I came from Arizona around the age of 3, so it's been a while!
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Old 16-08-2020, 05:32 PM   #2643
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Oh, by the way, did you get your US$1,200 in free COVID-19 money, with more possible if Congress and the President come to an agreement? You should be eligible, assuming your income wasn't too high last year.
I tried googling information about this but I must not be using the correct search terms, how do I check if I'm eligible?
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Old 16-08-2020, 06:43 PM   #2644
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What is considered a U.S. dollar-oriented country?
The United States, other countries that use the U.S. dollar (example: El Salvador), and countries with currencies firmly pegged to the U.S. dollar (example: Kuwait).

I came from Arizona around the age of 3, so it's been a while!
OK. Just be aware of what citizenship(s) your child(ren) will or will not be eligible for at birth, and depending on the other parent and per U.S. and other nationality laws. It’s really, really tough to be born stateless in this world. In most cases you won’t be able to pass U.S. citizenship to a child born outside the United States since you haven’t lived in the U.S. for at least 5 years, at least 2 of which were after age 14. (Children born inside the U.S., including its airspace and territorial waters, are born U.S. citizens — except the children of foreign diplomats.)

Arizona is a super competitive state in the upcoming election. Register and request a ballot now!

I tried googling information about this but I must not be using the correct search terms, how do I check if I'm eligible?
Check this page. Once you get a U.S. bank or U.S. credit union account try the “Get My Payment” button and see if that works, or the other button if applicable. You’ll need your U.S. account’s “routing number“ and account number. For example, Alliant Credit Union’s routing number is 271081528.

Last edited by BBCWatcher; 16-08-2020 at 06:56 PM..
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Old 16-08-2020, 08:37 PM   #2645
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Hi BBC, why is the dii rider in the saf aviva plan the most important in your opinion?

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Old 16-08-2020, 09:19 PM   #2646
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Hi BBC, why is the dii rider in the saf aviva plan the most important in your opinion?
The most important rider? Because if you need life insurance (the base plan), you need disability income insurance even more. (You may also need DII even if you don’t need life insurance.) Whether you get that specific DII rider or another policy is a separate question.
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Old 16-08-2020, 09:47 PM   #2647
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The most important rider? Because if you need life insurance (the base plan), you need disability income insurance even more. (You may also need DII even if you don’t need life insurance.) Whether you get that specific DII rider or another policy is a separate question.
Doesn't the ci or tpd rider provide similar use case as the dii?

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Old 16-08-2020, 11:08 PM   #2648
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Doesn't the ci or tpd rider provide similar use case as the dii?
Certainly not.
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Old 18-08-2020, 10:18 AM   #2649
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Whole life insurance (with CI & ECI) for young children

Hi Bbcwatcher, what's your view on getting whole life insurance (with CI & ECI) for young children (below 5)? Do you think it is good to lock in their insurability with a lower premium by buying early?
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Old 18-08-2020, 05:28 PM   #2650
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Hi Bbcwatcher, what's your view on getting whole life insurance (with CI & ECI) for young children (below 5)? Do you think it is good to lock in their insurability with a lower premium by buying early?
No, I don't think it's a good idea.
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Old 19-08-2020, 01:07 PM   #2651
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this article compares VT, IWDA, and DFA World Equity Fund. any thoughts?

VT has lower expense ratio, forex risk, 30% dividend withholding tax, estate tax, dividend distributing, brokerage fees.

IWDA has lower expense ratio, forex risk, 15% dividend withholding tax, no estate tax, dividend accumulating, brokerage fees.

DFA World Equity Fund has higher expense ratio, wrapper fee, no forex risk, has 30% dividend withholding tax, no estate tax, dividend accumulating. Endowus has no platform fees, MoneyOwl is waiving it.









https://investmentmoats.com/money/in...ors-dfa-funds/
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Old 19-08-2020, 02:20 PM   #2652
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this article compares VT, IWDA, and DFA World Equity Fund. any thoughts?
There are some problems with the spreadsheet, including:

1. Everybody has tracking error. There should be no zeros in that row. It's possible that a particular fund manager has more tracking error than some other, but if that's the case it'll be the gigantic fund managers like Vanguard and BlackRock that have the least.

2. Relatedly, there are bid-ask spreads with mutual funds and unit trusts, too. Part of the spread is incorporated in the lack of intra-day price quotations versus their exchange-traded counterparts. I really don't think there's any material difference here.

3. The U.S. estate tax rate is never 40%. It's always less than 40%, sometimes as low as zero. The 40% rate is only the top marginal U.S. estate tax rate, never the average rate.

4. I have no idea what the author means with a zero entry for dividend taxes in the Infinity Global column. Dividend taxes very much apply, always.

5. Some financial institutions charge dividend distribution and/or fund/corporate action fees, and I think that ought to be an additional row.

6. Some of these choices automatically reinvest dividends, and some don't. Automatic dividend reinvesting is usually more cost efficient.

VT, IWDA, and the DFA World Equity Fund have virtually the same forex risk(s), differing only in terms of the differences in the stocks they hold and their associated second order currency effects. DFA happens to be quoted in Singapore dollars, but that detail doesn't make any difference at all except that the fund manager handles the currency conversions to/from Singapore dollars on the buy/sell sides (since the vast majority of the securities the fund holds to track the global index are quoted/listed/traded in currencies other than Singapore dollars), and the currency conversion costs end up in the fund's total expense ratio (TER). Stocks are not currencies themselves, so there's no first order foreign currency risk when investing in stocks. Stocks are not bonds.

Last edited by BBCWatcher; 19-08-2020 at 02:23 PM..
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Old 20-08-2020, 08:15 AM   #2653
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Business Insider noticed a fun fact: over half of Berkshire Hathaway’s market value now consists of Apple stock and cash. That high concentration risk might be OK, or even better than OK, for Warren Buffett — an open question, but maybe. However, you are not Warren Buffett with an investment company worth hundreds of billions of U.S. dollars. I don’t think your personal investment portfolio should be structured this way, and hopefully you’re not doing that.
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Old 20-08-2020, 05:28 PM   #2654
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Hi BBCW,

Besides those etf that you recommended for long term holding such as VWRA, IWDA etc, as well as MBH and topping up CPF, what other etfs or instructment that you will recommended for long term investment?

Do you recommend investing into the following specific sector etfs:

1. OGIG
2. IXJ
3. CFA
4. CQQQ
5. SMH

I plan to DCA monthly. What other etf besides the list above do you recommend?

Thank you.
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Old 20-08-2020, 06:04 PM   #2655
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There are some problems with the spreadsheet, including:

1. Everybody has tracking error. There should be no zeros in that row. It's possible that a particular fund manager has more tracking error than some other, but if that's the case it'll be the gigantic fund managers like Vanguard and BlackRock that have the least.

2. Relatedly, there are bid-ask spreads with mutual funds and unit trusts, too. Part of the spread is incorporated in the lack of intra-day price quotations versus their exchange-traded counterparts. I really don't think there's any material difference here.

3. The U.S. estate tax rate is never 40%. It's always less than 40%, sometimes as low as zero. The 40% rate is only the top marginal U.S. estate tax rate, never the average rate.

4. I have no idea what the author means with a zero entry for dividend taxes in the Infinity Global column. Dividend taxes very much apply, always.

5. Some financial institutions charge dividend distribution and/or fund/corporate action fees, and I think that ought to be an additional row.

6. Some of these choices automatically reinvest dividends, and some don't. Automatic dividend reinvesting is usually more cost efficient.

VT, IWDA, and the DFA World Equity Fund have virtually the same forex risk(s), differing only in terms of the differences in the stocks they hold and their associated second order currency effects. DFA happens to be quoted in Singapore dollars, but that detail doesn't make any difference at all except that the fund manager handles the currency conversions to/from Singapore dollars on the buy/sell sides (since the vast majority of the securities the fund holds to track the global index are quoted/listed/traded in currencies other than Singapore dollars), and the currency conversion costs end up in the fund's total expense ratio (TER). Stocks are not currencies themselves, so there's no first order foreign currency risk when investing in stocks. Stocks are not bonds.
thanks for this, it is very insightful.

since this is quoted in SGD, wouldn't it be better for the investor to take forex risk indirectly via fund manger instead of taking it on directly by themselves? i understand that either way there will still be forex risk (directly or indirectly), but the difference is that at which part of the process is the forex risk been taken upon.

on withholding tax, i would suppose since DFA funds are domiciled in Ireland, it will be more tax efficient as compared to funds that are domiciled in US? and on the estate tax, wouldn't it be ideal if there isn't any to start with, regardless of the percentage (comparing VT to DFA World Equity Fund).
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